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REPORT ON
SEPTEMBER, 2008
EXECUTIVE SUMMARY
The Electricity Act, 2003 makes elaborate provisions which seek to protect the
interests of consumers. The National Electricity Policy and the Tariff Policy framed
under the Act reinforce its provisions. They stipulate a road map and action plan for
In line with the provisions of the Act and the policies, steps have been taken by
redressal machinery, such as the Consumer Grievance Redressal Forum (CGRF) and the
ombudsman. Performance standards have also been specified delineating, inter alia, the
institutionalized in some states to educate consumers about their rights and obligations.
The Forum of Regulators (FOR) has been deliberating on issues specific to the
protection of consumers’ interests on a regular basis. In its meeting held in June 2008,
FOR felt the need to review the steps taken in various states, and to address the issues
handling consumer related issues. The Forum thus constituted a Working Group
consisting of chairpersons of a few State Commissions with the mandate to examine all
such issues in detail and submit report before the Forum. The Group submitted its report
which was considered by the FOR in its meeting held in September, 2008.
The report as approved by the FOR: (i) examines in detail the various legal
provisions in the context; and (ii) analyses the issues at stake after taking into
consideration the views of the stakeholders through interaction with various stakeholders
including NGOs, ombudsmen and selected academic and research institutions. The report
Forum of Regulators
Protection of Consumer Interest Executive Summary
finds that some provisions of the Act especially those relating to CGRF and ombudsman
The report examines the provisions with specific reference to the recommendations of the
institutions of CGRF and Ombudsman. The report also suggests various steps to make the
functioning of the CGRF and ombudsman effective. The report specifically: (i)
and (ii) suggests a framework for monitoring the performance of these institutions,
implementation of their orders, and remedial steps for non- compliance of their orders.
The report also goes into the issues relating to institutionalization of consumer
advocacy and suggests a model consumer charter for State Commissions to adopt.
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Protection of Consumer Interest
CONTENTS
Executive Summary
1. Introduction…………………………………………………………………...1-2
2. Approach………………………………………………………………………3-5
4. Implementation Status……………………………………………………...16-18
6. Issues………………………………………………………………………...20-42
List of Abbreviations
APPENDIX
Forum of Regulators
Protection of Consumer Interest Introduction
CHAPTER - 1
INTRODUCTION
1.1 The consumer remains the focus of reforms in the electricity sector in India. The
liberal framework envisaged in the Electricity Act, 2003 is aimed at ensuring that
the efficiency gains achieved through competition get translated into benefits for
consumers. Apart from the framework of competition, the Act also makes specific
1.2 The FOR, in its meeting held on June 13, 2008 at New Delhi, deliberated on the
the provisions of the Electricity Act, 2003, and the rules made thereunder. The
FOR reviewed the steps taken by various State Commissions in this regard and
felt that there were a number of issues which either required clarification or
a few chairpersons of State Commissions with the mandate to examine all such
issues in detail and submit a report to FOR within a period of three months.
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Protection of Consumer Interest Introduction
1.4 The mandate for the Working Group was to make recommendations on:
• Steps required to make the functioning of the CGRFs and ombudsmen more
effective;
and funding;
and
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Protection of Consumer Interest Approach
CHAPTER - 2
APPROACH
2.0 Approach
The Working Group adopted the following approach to analyse the issues relating
2.1.1 The Group examined the various provisions of the Electricity Act, 2003, the
and the rules framed by the Government of India (GoI) with specific reference to
2.1.2 The objective was to appreciate the vision behind these legal provisions in terms
2.2.1 The Working Group compiled information from various State Commissions in
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Protection of Consumer Interest Approach
2.2.2 The objective was to assess as to whether the vision of the statute has been
accomplished through actions taken by the State Commissions, which have the
2.3 Interaction with NGOs, ombudsmen and select institutions engaged in studies
2.3.1 The Working Group interacted with NGOs which are actively involved in
Commissions, Appellate Tribunal, High Courts and the Supreme Court. The
Group also interacted with the ombudsmen appointed in some states. Interaction
was also held with institutions, such as the Administrative Staff College of India
2.3.2 The objective was to have a first-hand experience of how the grievances of
2.4.1 Based on the analysis of the legal provisions and status of implementation of such
provisions, and after detailed interaction with the persons involved at the
Working Group sought to assess the gap that remained between the vision and the
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Protection of Consumer Interest Approach
2.5 The Working Group also studied the various models on consumer advocacy and
2.6 The Working Group also referred to the report of The Energy and Resource
2.7.1 The Working Group relied on a detailed study and assessment based on
address the issues that seem to be affecting the interests of consumers in the
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Protection of Consumer Interest Legal Provisions Regarding Consumers’ Interest
CHAPTER - 3
INTERESTS
3.1 The Electricity Act, 2003 makes comprehensive provisions seeking to protect the
safeguarding consumers’ interests gets reiterated right in the preamble of the Act
trading and use of electricity and generally for taking measures conducive to
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Protection of Consumer Interest Legal Provisions Regarding Consumers’ Interest
3.2 The Act goes on to make specific provisions seeking to protect the consumers’
interests. Section 43 of the Act provides for universal service obligation for the
failing which the licensee is liable to pay compensation to the affected consumer.
“Section43. (Duty to supply on request): --- (1) Save as otherwise provided in this
of any premises, give supply of electricity to such premises, within one month
for supply of electricity exists, the Appropriate Commission may extend the said
area.
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Protection of Consumer Interest Legal Provisions Regarding Consumers’ Interest
electric plant or electric line for giving electric supply to the premises specified in
sub-section (1):
from a licensee a supply of electricity for any premises having a separate supply
unless he has agreed with the licensee to pay to him such price as determined by
(3) Ifa distribution licensee fails to supply the electricity within the period
3.3 Section 42 of the Electricity Act, 2003 provides, inter alia, for the establishment
of a CGRF for settling the grievances of consumers. It also provides for a channel
stage of CGRF :
“Section 42. (Duties of distribution licensee and open access): --- (1) ……..
(2) ……………………………………………………………………..
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Protection of Consumer Interest Legal Provisions Regarding Consumers’ Interest
(5) Every distribution licensee shall, within six months from the appointed
sub-section (5), may make a representation for the redressal of his grievance
(7) The ombudsman shall settle the grievance of the consumer within such
3.4 Section 56 of the Act provides, inter alia, that no sum due from a consumer can be
recovered after a period of two years unless such sum has been shown as arrears
continuously from the date such sum became first due. The relevant provision is
reproduced below:
person neglects to pay any charge for electricity or any sum other than a charge
for electricity due from him to a licensee or the generating company in respect of
or the generating company may, after giving not less than fifteen clear days’
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Protection of Consumer Interest Legal Provisions Regarding Consumers’ Interest
notice in writing, to such person and without prejudice to his rights to recover
such charge or other sum by suit, cut off the supply of electricity and for that
purpose cut or disconnect any electric supply line or other works being the
may have been supplied, transmitted, distributed or wheeled and may discontinue
the supply until such charge or other sum, together with any expenses incurred by
him in cutting off and reconnecting the supply, are paid, but no longer:
Provided that the supply of electricity shall not be cut off if such person deposits,
under protest, -
(b) the electricity charges due from him for each month calculated on the basis of
average charge for electricity paid by him during the preceding six months,
whichever is less, pending disposal of any dispute between him and the licensee.
(2) Notwithstanding anything contained in any other law for the time being in
force, no sum due from any consumer, under this section shall be recoverable
after the period of two years from the date when such sum became first due unless
such sum has been shown continuously as recoverable as arrear of charges for
electricity supplied and the licensee shall not cut off the supply of the electricity.”
3.5 Section 57 of the Act requires the appropriate Commission to frame regulations
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Protection of Consumer Interest Legal Provisions Regarding Consumers’ Interest
he is liable to pay penalty. Section 59 of the Act provides for monitoring all such
Regulatory Commissions:
The Appropriate Commission may, after consultation with the licensees and
class of licensees.
(2) If a licensee fails to meet the standards specified under sub-section (1),
(3) The compensation determined under sub-section (2) shall be paid by the
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Protection of Consumer Interest Legal Provisions Regarding Consumers’ Interest
licensee shall, within the period specified by the Appropriate Commission, furnish
(a) thelevel of performance achieved under sub-section (1) of the section 57;
(b) thenumber of cases in which compensation was made under sub-section (2) of
(2) The Appropriate Commission shall at least once in every year arrange or the
Nothing contained in this Act or any rule or regulation made thereunder or any
instrument having effect by virtue of this Act, rule or regulation shall have effect
Act, 1986 or the Atomic Energy Act, 1962 or the Railways Act, 1989.
Save as otherwise provided in section 173, the provisions of this Act shall have
for the time being in force or in any instrument having effect by virtue of any law
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Protection of Consumer Interest Legal Provisions Regarding Consumers’ Interest
3.6 The GoI has also framed rules giving flesh to the provisions of the CGRF and
ombudsman. The relevant rules (Rule 7 of the Electricity Rules, 2005 (as
(1) The distribution licensee shall establish a Forum for Redressal of Grievances
Provided that the manner of appointment and the qualification and experience of
the persons to be appointed as member of the Forum and the procedure of dealing
with the grievances of the consumers by the Forum and other similar matters
sub-section (6) of section 42 of the Act shall be such person as the State
consistent with the provisions of the Act, the Rules and Regulations made
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Protection of Consumer Interest Legal Provisions Regarding Consumers’ Interest
(4) (a) The ombudsman shall prepare a report on a six monthly basis giving
Commission under section 57 of the Act during the preceding six months.
(b) The report under sub-clause (a) above shall be forwarded to the State
Commission and the State Government within 45 days after the end of the
percentage defective meters and waiting list of new connections. The Appropriate
by the distribution licensee. A road map for declaration of RI for all cities and
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Protection of Consumer Interest Legal Provisions Regarding Consumers’ Interest
towns up to the District Headquarter towns as also for rural areas, should be
5.13.3 It is advised that all State Commissions should formulate the guidelines
and their effective representation before the Regulatory Commissions. This will
3.8 “Para 8.0 - Supply of reliable and quality power of specified standards in an
efficient manner and at reasonable rates is one of the main objectives of the
National Electricity Policy. The State Commission should determine and notify
transition framework could be provided for the licensees to reach the desired
accordance with section 57 of the Act for failure to meet the standards.”
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Protection of Consumer Interest Implementation Status
CHAPTER - 4
IMPLEMENTATION STATUS
4.1 The Working Group reviewed the status of implementation of various provisions
advocacy, performance standards and quality of supply. For the actual status see
APPENDIX- II to VII.
4.2 The Working Group noted that most of the State Electricity Regulatory
Commissions (SERCs) have notified the regulations stipulating the guidelines for
ombudsman have also been established in most states. A number of cases have
4.3 The Working Group also noted that most of the SERCs have notified regulations
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Protection of Consumer Interest Implementation Status
4.4 The Working Group also reviewed the status of implementation of consumer
advocacy and found that different models of consumer advocacy were being
followed in different states. The State Commissions have been adopting different
NGOs for consumer education and empowerment and is reported to have used the
technique of street plays (Nukkar Natak) to spread the information in the local
Regulatory Commission (JSERC) has advertised through the `Kya Aap Jante
Hai?’ series to educate the consumers about their rights and duties. However, a
4.5 The Karnataka Electricity Regulatory Commission (KERC) has taken salutary
before the High Court and the Appellate Tribunal of Electricity (ATE). The
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Protection of Consumer Interest Implementation Status
4.6 The Working Group also noted the important steps taken by the Uttarkhand
Regulations, and directions regarding display boards. The display boards (4'x3')
have been installed at all cash collection centres, and divisional and sub-divisional
Goshthies at various remote places to educate consumers about their rights under
Forum of Regulators 18
Protection of Consumer Interest Interaction with Stakeholders
CHAPTER - 5
related issues, the Working Group interacted with NGOs, such as Mumbai Grahak
5.2 Interaction with ombudsmen: The Working Group also interacted with the
5.3 Interaction with ASCI: The ASCI was engaged by the Ministry of Power, GoI to
Electricity Act, 2003.’ The Working Group interacted with ASCI to understand its
findings with a view to ensuring that all important issues are addressed by the
5.4 For a note on the issues highlighted by these stakeholders in the course of
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Protection of Consumer Interest Issues
CHAPTER - 6
ISSUES
demanded detailed analysis based on: (a) a detailed study of various provisions of
the law; (b) the vision behind those provisions; and (c) due consideration and
regard to the views of the stakeholders including NGOs, ombudsmen and the
6.1.1 The penalty under section 43 can be imposed only by the SERCs. Similarly,
6.1.1.1 The Working Group examined the provisions of section 43 and section 57 of
the Act as also the provisions of section 42(5) and section (6). It concluded
that the law makers seemed to have been conscious in granting powers of
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Protection of Consumer Interest Issues
authority, had not been granted any such power. So far as CGRF was
consumers. The same was the role of the ombudsman but outside the fold of
the licensee. The Act provided that these fora were to operate as per the
were enforced under section 142 of the Act. This explained why powers of
2 of section 56 of the Act and there are orders of the High Courts of various
states which have given divergent decisions. The issue is whether limitation of
two years would apply from the date when the amount became first due or
from the date when the amount was first shown in the bill.
6.1.2.1 The Group examined the specific judgments of the High Courts of Mumbai,
Delhi and the order of the ATE in this regard. The relevant extracts are
reproduced below:
6.1.2.2 Extract from the judgment dated October 05, 2006 of the Bombay High Court
in W.P. (L) No. 2221 of 2006 (Awadesh S. Pandey vs. Tata Power Co. Ltd.):
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Protection of Consumer Interest Issues
do not empower respondent No. 1 to recover any amount if the period of two
years has elapsed nor can electricity supply be cut off for non-payment of
was strenuously urged that Section 56(1) cannot be resorted to after the
period of two years from the date when such demand became first due. In our
recovery by cutting off electricity supply is limited for a period of two years
from the date when such sum became due. As long a sum is due, which is
within two years of the demand and can be recovered, the licensee of the
the licensee or the generating company to recover its dues expeditiously. The
dues. Apart from the above mechanism, independently it can make recovery
by way of a suit.”
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Protection of Consumer Interest Issues
6.1.2.3 Extract from the judgment dated November14, 2006 of the Appellate Tribunal
in Appeal No. 202 & 203 of 2006 (Ajmer Vidyut Vitran Nigam Limited, vs.
Chittorgarh, Rajasthan vs. M/s Sisodia Marble & Granites Pvt. Ltd. & Ors):
“The basic question for determination is what is the meaning of the words
‘first due’ occurring in Section 56(2) of the Electricity Act, 2003. … In H.D.
Shourie vs. Municipal Corporation of Delhi, AIR 1987 Delhi 219, the Delhi
High Court has ruled that electricity charges become first due after the bill is
sent to the consumer and not earlier thereto. ………. In our opinion, the
consumed or the date the meter reading is recorded or the date meter is found
defective or the date theft of electricity is detected but the charges would
become first due for payment only after a bill or demand notice for payment is
sent by the licensee to the consumer. The date of the first bill/demand notice
for payment, therefore, shall be the date when the amount shall become due
and it is from that date the period of limitation of two years as provided in
6.1.2.4 In this context it would also be relevant to mention the judgment by Hon’ble
Calcutta High Court in Mahesh Oil Mill & Another, vs. State of West Bengal
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Protection of Consumer Interest Issues
& Another (Writ Petition No. 516 of 2005) decided on February19, 2007 may
be referred.
7. It is really confusing when the counsel for CESC says that his client did not
demand payment of the amount as one due and recoverable from the
apparent that CESC demands the amount as sums due and recoverable from
the petitioners as arrears of charges for electricity supplied during the months
Section 56(2), that CESC was simply not empowered and entitled to issue the
notice threatening to cut off supply of electricity on failure to pay the amount,
from 1993 till raising the bill for September 2004 the amount in question had
never been shown in any bill or in any other document, sent and served on the
electricity supplied.
8. It is not a case where the petitioners are seeking advantage of any mistake
the case of CESC that it had actually committed a mistake while disclosing the
figure of the suspense account before the arbitrator. The disputes were settled
by it before the arbitrator. The award was made long ago. There is nothing
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Protection of Consumer Interest Issues
to show that the mistake was detected by CESC immediately after the award
9. The admitted fact is that for the period for which it demanded payment from
the petitioners, payments had been duly made by the petitioners. If because of
its own mistake it received a lesser amount in terms of the award (because of
raised in September 2004 calling upon the petitioners to pay for the same
period twice over. I therefore hold that for non-payment of the amount
demanded by the impugned bill CESC was not entitled to cut off supply of
10. For these reasons, I set aside the impugned bill (for the month September
2004) and declare that for non-payment of the amount demanded thereby for
the months in question, CESC was not and is not entitled to cut off supply of
electricity to the petitioners. The writ petition is allowed to this extent. There
shall be no order for costs in it. Urgent certified xerox copy of this order
shall be supplied to the parties, if applied for, within three days from the date
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Protection of Consumer Interest Issues
6.1.2.5 There are divergent judgments in the issue in question. The Group noted the
position.
6.1.3 Can a person who has applied for a new connection be considered as
6.1.3.1 The Group examined this issue in the light of the judgment of the Supreme
Court in the case of the Lucknow Development Authority (LDA) vs. M.K.
Gupta. [CA 6237 (1990) dated 5th November 1993], wherein the Court inter
alia interpreted the question as to whether a person who applied for a house
from the LDA could be treated as a consumer and observed that a person who
‘applied’ was a ‘potential user’ and would be covered by the definitions of the
words ‘service’ and ‘consumer’ under the said Act and would be eligible for
The Consumer Protection Act, 1986 opts for no less wider definition. It reads
(i) buys any goods for a consideration which has been paid or promised or
partly paid and partly promised, or under any system of deferred payment and
includes any user of such goods other that the person who (buys such goods
and system of deferred payment when such use is made with the approval of
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Protection of Consumer Interest Issues
such person but does not include a person who obtains such goods for resale
(ii) hires or avails of any services for a consideration which has been paid or
promised or partly paid and partly promised, or under any system of deferred
payment and includes any beneficiary of such services other than the person
partly paid and partly promised, or under any system of deferred payment,
when such services are availed of with the approval of the first mentioned
person:
not include use by a consumer of goods bought and used by him exclusively
…….
personal service.
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Protection of Consumer Interest Issues
6.1.3.2 The Group felt that given the fact that the Consumer Protection Act, 1986 has
been given precedence over the Electricity Act, 2003 (in terms of sections 173
and 174 of the Act), the above interpretation – that a potential user could be
6.1.4 Whether the regulations made by SERCs under section 42 (5) and (6) can
matter before the CGRF and also before the ombudsman, only where the
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Protection of Consumer Interest Issues
6.1.4.1 The general sentiment on the issue was that engagement of legal practitioners
by licensees when consumers are not engaging or are not able to engage
directed the FOR Secretariat to seek legal opinion on the above question. The
Secretariat solicited opinion on the issue from M/s Hemant Sahai Associates
who advised that “the Electricity Act, 2003 provides for the establishment of
such proceedings before the CGRF may not be adversarial in nature, and in
fact may not even be proceedings with any legal connotation. Accordingly, in
consumers through the mechanism of CGRF, both parties (i.e. the consumer
restricting the right of the lawyers to appear before the ombudsman, any
under Section 181(2) (r), (s) read with Section 42(5), (6) and & (7) cannot
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Protection of Consumer Interest Issues
impose such restriction on the practice of lawyers before the ombudsman. Any
amounts to a direct interference with the right of the lawyers to practice in the
forums as prescribed in Section 14(1)(a), (b), (c) of the Indian Bar Council
Act, 1926.
Having regard to the fact that consumers in certain cases are unable to avail
appropriate legal assistance for pursuing their cases, the Commission may
Further, the extent to which legal expenses of a licensee are incurred towards
putting the utilities to bear their own legal expenses in such matters.”
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Protection of Consumer Interest Issues
6.1.4.2 The Group considered the legal opinion in the context and recommended that
and (6) of the Act. In respect of the resolution of the grievances of consumers
through the mechanism of CGRF – which was an organ of the licensee and
where proceedings may not be adversarial in nature - both parties (i.e. the
absence of a specific provision in the Act. The Group felt that wherever there
6.2.1 The Group found that there were two schools of thought on the issue as to
licensee.
6.2.1.1 The Group examined the legal provisions in this regard and relevant provision
viz. section 42(5) which reads as follows: “Every distribution licensee shall,
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Protection of Consumer Interest Issues
within six months from the appointed date or date of grant of licence,
consumers.”
6.2.1.2 The Group also referred to the relevant recommendations (in para 8.69 of the
that these Forums are to work under the licensees only.... The Committee,
6.2.1.3 The Group felt that reading of the provision contained in section 42(5) of the
Act read with recommendation (para 8.69 of the report of the Standing
6.2.1.4 The Group noted that several State Commissions had treated CGRF as a
machinery as the first channel of appeal. The Group felt that such a practice
does not go with the letter and spirit of the Act. Therefore, it is required to be
ensured that the consumer having a grievance should have right to approach
staff or other committee set up by the licensee. Though the consumer should
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Protection of Consumer Interest Issues
the local utility staff with the consumers may also be encouraged as these
have proved useful in resolving petty and routine issues. The Group noted that
and felt that this spirit should be followed by all SERCs across the board.
6.3 Whether licensee should also have the right to appeal before the ombudsman?
6.3.1 The Group noted that some State Commissions had reservations on the provisions
of section 42(6) of the Act in that the said provision did not give a right to the
licensees to appeal before the ombudsman against the orders of CGRF. The
Group noted that the given the fact that CGRF was conceived as an internal organ
of the licensee, it was obvious that the orders of the CGRF would be acceptable to
the licensee and that only the aggrieved consumer could have grievance against
the order of such internal organ of the licensee. Thus, logically the Act did not
provide for the right to a licensee to appeal against the orders of CGRF.
6.3.2.1 It was noted that various SERCs have adopted different methods of
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Protection of Consumer Interest Issues
6.3.2.2 The Group observed that proviso to Rule 7 of the Electricity Rules, 2005 (as
CGRF. The ERCs in Maharashtra and Uttarakhand had already specified the
licensee. The findings of ASCI also reiterated that the chairperson of the
by the State Commission. The Group, therefore, felt that SERCs may consider
chairperson of the CGRF was not a serving employee of the utility. It was felt
that the requirement in Rule 7 of the Electricity Rules that the Forum “shall
consist of officers of licensee” did not imply that the officer had to be a
Forum was paid by the licensee, such a member could be treated as an ‘officer
of licensee’ and the requirement of Rule 7 would be met. It was; however, felt
that association of one or two serving officers of the licensee with CGRF was
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Protection of Consumer Interest Issues
6.3.3.1 The Group felt that since the institution of CGRF was meant to look into the
6.3.3.2 It was therefore felt that the CGRF should be located at a place which was
Ideally, CGRF should hold sittings at different places on predefined dates for
Madhya Pradesh.
6.4 The Group felt that a proper funding structure would be necessary to ensure
impartial functioning of the CGRF. The practice in this regard varied from state to
state. The Group considered the suggestion of the ASCI in this regard. However,
it felt that CGRF being an internal organ of the licensee, the expenditure of the
6.4.1.1 The Group noted that the orders of the CGRFs were not being complied with
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Protection of Consumer Interest Issues
SERCs and the licensee would be liable for action under section 142 of the
Act.
6.4.1.2 The Group felt that all SERCs should make similar provisions in their
6.4.2.1 It was brought to the notice of the Group that there were occasions in some
states where the grievance brought before the CGRFs had not been settled or
6.4.2.2 The Group felt that inaction or deliberate delay caused by the CGRF in
establishing such an institution and runs counter to the provisions of the Act.
6.4.2.3 It was felt that each SERC while specifying the regulation in this regard
should provide a time limit (say 45 days or 60 days for different categories of
provided that in the event of a CGRF not disposing of the grievances within
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Protection of Consumer Interest Issues
the stipulated time period, the consumer should have the right to approach the
addition, the provisions of section 142 of the Act may also be invoked for
6.5 Ombudsman
The Group noted that in some SERCs, the officer of the Commission had been
should be created on a full-time basis with a view to ensuring that proper attention
retired person from the utility or the government, having stature and standing as
The Group noted that there was a doubt on the issue as to whether approval was
required under Section 91 of the Act for creating a post for appointment of an
ombudsman. The Group examined the issue in detail and felt that Section 91
dealt with creation of regular posts for the Regulatory Commission and that an
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Protection of Consumer Interest Issues
Since the provision for the appointment of an ombudsman was made in Section
42 (6) of the Act, there was no need for creation for a separate post for
Ombudsman and his supporting staff. Consequently, there was no need for
seeking approval of the government under Section 91 of the Act. The office of the
ombudsman and the supporting office may be created under the relevant
It was opined by some State Commissions that the Act did not provide for a
forum of appeal against the orders of the ombudsman. There was a general
would seek to settle the grievances through conciliation. In any case, writ petition
against the order of the ombudsman could always lie before the High Court. In
this connection, the Group referred to the judgment of the Allahabad High Court
in the civil miscellaneous Writ Petition No. 16216 of 2008, dated April 2, 2008.
The High Court in its order stated, inter alia, that: “where the electricity
ombudsman or any fraud alleged and proved on record. In any other case, the
interference with award is limited to the grounds, which may be taken under
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Protection of Consumer Interest Issues
section 34 of the Arbitration and Conciliation Act, 1996.” If the grievance is not
settled through conciliation, the ombudsman has the power to proceed with the
grievance and make orders. This is held by Hon’ble High Court of Madras in
Dharmapuri Electricity Distribution Circle vs. Meenakshi Udyog India Pvt. Ltd.
The Group reviewed the practice of funding the office of ombudsman and felt that
the expenses of the office of ombudsmen should not be met from the financial
support directly from the distribution licensee, as it might raise a question on the
separate budgetary allocation could be made in the budget of SERC to that extent.
The SERC may recover such expenses from the licensees directly.
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Protection of Consumer Interest Issues
The Group reviewed the mechanism adopted by some SERCs for monitoring the
performance of the grievance redressal machinery. It was felt that several SERCs
were yet to put in place a proper monitoring mechanism. It was agreed that the
SERCs. The relevant extract of the Rule is quoted as follows: “(a) The
ombudsman shall prepare a report on a six monthly basis giving details of the
nature of the grievances of the consumer dealt by the ombudsman, the response of
the licensees in the redressal of the grievances and the opinion of the ombudsman
Commission under section 57 of the Act during the preceding six months; (b) The
report under sub-clause (a) above shall be forwarded to the State Commission
and the State Government within 45 days after the end of the relevant period of
six months.”
It was also opined that a six monthly conference of the CGRF members and the
the order of CGRF or ombudsman and not just the passing of order by these
bodies.
Forum of Regulators 40
Protection of Consumer Interest Issues
6.6.1 The Group specifically noted the steps taken by the SERCs of Madhya Pradesh,
6.6.2 It was observed that NGOs should be involved in consumer education and
6.6.3 As regards consumer advocacy, it was opined that consumers’ groups might not
be funded from the budget of the SERC as there could be an occasion when
other fora. However, if such funding was not on a case to case basis but was given
as an annual fixed grant then conflict of interest would not be an issue. It was
6.6.4 It was agreed that FOR should financially support identified competent NGOs or
Courts, Apellate Tribunal of Electricity (APTEL) and the Supreme Court so that
Forum of Regulators 41
Protection of Consumer Interest Issues
advocates for participating in: (a) tariff hearing to represent interests of domestic,
agricultural, and SSI-LT category consumers; (b) hearing for load shedding
6.6.6 It was felt that SERCs should organize regular orientation courses for capacity
by FOR in order to give the consumer advocates wider awareness and opportunity
The Group noted that consumer charters have been issued by some State
charters as also the consumer charters issued by other regulatory bodies like TRAI
Forum of Regulators 42
Protection of Consumer Interest Conclusions and Recommendations
CHAPTER - 7
7.0 Sincere efforts have been made by the Regulatory Commissions in attaining the
conclusion was reached after: (a) a detailed analysis of the issues at stake; (b)
examination of the case laws backed by legal opinion on some critical issues; and
great deal more needs to be done. The major findings and recommendations are
summarized below.
7.1 The Regulatory Commissions have been given adequate powers under the Act to
section 43, compensation under section 57 and invoking section 142 of the Act
7.2 There is a general sentiment against the practice of the licensees engaging lawyers
in proceedings before the CGRF and ombudsman. This puts into a disadvantaged
Forum of Regulators 43
Protection of Consumer Interest Conclusions and Recommendations
regulations framed under section 42(5) and (6) of the Act that in respect of the
which is an organ of the licensee and where proceedings may not be adversarial in
nature - both parties (i.e. the consumer and the distribution licensee) shall not be
not be legally tenable in the absence of a specific provision in the Act. It is,
the SERCs.
7.3 Some State Commissions have treated the CGRF as a second channel of appeal
appeal. Such a practice does not go with the letter and spirit of the Act. This is
clearly evident from the wordings of the provision in section 42(5) of Act and the
Bill, 2001. The CGRF should be treated as the internal first-level grievance
redressal organ. Some State Commissions had passed orders merging internal
necessary to ensure that the consumer who has a grievance should have the right
Forum of Regulators 44
Protection of Consumer Interest Conclusions and Recommendations
particular staff or other committee set up by the licensee. Though the consumer
should have a right to directly approach the CGRF, periodic meetings and
interactions by the local utility staff with the consumers may also be encouraged
7.4 In the context of the provisions of section 42(6) of the Act, there are sentiments
that the said provision does not give right to the licensees to appeal before the
ombudsman against the orders of the CGRF. It is reiterated that given the fact that
the CGRF has been conceived as an internal organ of the licensee, it is assumed
that the orders of the CGRF would be acceptable to the licensee and that only the
aggrieved consumer could have grievance against the order of such an internal
organ of the licensee. Thus, logically the Act did not provide for the right of a
7.5 According to the Rule 7 (as amended) of the Electricity Rules, 2005, the manner
the State Commission. The qualification and experience required for the
as to ensure that the person is not serving as a regular employee of the licensee. It
is observed that the requirement in Rule 7 of the Electricity Rules, 2005 that the
Forum “shall consist of officers of licensee” does not imply that the officer had to
be a regular officer of the licensee. So long as the salary of the member of the
Forum of Regulators 45
Protection of Consumer Interest Conclusions and Recommendations
licensee’ and the requirement of Rule 7 would be met. It is, however, suggested
that association of one or two service officers of the licensee with CGRF is
7.6 Since the idea behind creating the institution of CGRF is redressal of grievances
Ideally, CGRF should hold sittings at different places but there should be
7.7 As the CGRF is an internal organ of the licensee, it is recommended that the
7.8 All SERCs should make provisions in their regulations clearly stipulating that
regulations of SERC making the licensee liable for action under section 142 of the
Act.
7.9 Each SERC, while specifying the regulation under section 42(5) and (6), should
provide a time limit (say 45 days or 60 days) for disposal of grievances by the
Forum of Regulators 46
Protection of Consumer Interest Conclusions and Recommendations
CGRF. In the event of the CGRF not disposing off the grievances within the
stipulated time period, the consumer should have the right to approach the
addition, the provisions of section 142 of the Act may also be invoked for non-
full-time basis so that proper attention is given to the resolution of the grievances
7.11 Section 91(2) deals with creation of a regular post for the Regulatory Commission
Commission. Since the provision for the appointment of an ombudsman has been
made in the Act itself in Section 42 (6), there is no need for the creation for a
separate post for ombudsman and consequently there is no need for seeking
7.12 There is a general sentiment that the Act does not provide for a forum of appeal
against the orders of the ombudsman. The institution of ombudsman has been
This is borne out by the Allahabad High Court judgment in the civil
miscellaneous Writ Petition No. 16216 of 2008, dated April 2, 2008. If the
Forum of Regulators 47
Protection of Consumer Interest Conclusions and Recommendations
grievance is not settled through conciliation, the ombudsman has the power to
proceed with the grievance and make orders. In any case, however, a writ
petition against the order of the ombudsman could always lie before the High
7.13 Expenses of the office of the ombudsman should not be met by the distribution
allocation could be made in the budget of SERC for this purpose. The SERC may
7.14 Several SERCs are yet to put in place a proper mechanism for monitoring the
grievance redressal machinery. The provision in the rule issued by GoI stipulating
7.16 It is recommneded that NGOs should be involved for consumer education and
Forum of Regulators 48
Protection of Consumer Interest Conclusions and Recommendations
amongst the consumers. This would be best achieved by printing the ‘consumers’
rights’ on the back of the electricity bill. This would ensure wider access of
7.17 As regards consumer advocacy, consumers’ groups should not be funded from the
budget of the SERC as there could be an occasion when consumers’ groups could
such funding is not on a case to case basis but is given as an annual fixed grant,
Consumer Affairs.
High Courts, APTEL, and the Supreme Court so that consumers’ interests are
effectively represented.
advocates for participating in: (a) tariff hearing to represent interests of domestic,
agricultural, and SSI-LT category consumers; (b) hearing for load shedding
protocols; and (c) hearing for framing standards of performance. However, there
is a need for further deliberation for the ways and means for strengthening the
Forum of Regulators 49
Protection of Consumer Interest Conclusions and Recommendations
7.20 SERCs should organize regular orientation courses for capacity building of
order to give the consumer advocates wider awareness and opportunity for
7.21 Each SERC should notify a consumer charter based on the model charter
Forum of Regulators 50
Protection of Consumer Interest
List of Abbreviations
AERC Assam Electricity Regulatory Commission
APERC Andhra Pradesh Electricity Regulatory Commission
APTEL Appellate Tribunal of Electricity
ASCI Administrative Staff College of India
ATE Appellate Tribunal of Electricity
BERC Bihar Electricity Regulatory Commission
CEA Central Electricity Authority
CERC Central Electricity Regulatory Commission
CESC Calcutta Electricity Supply Company
CGRF Consumer Grievance Redressal Forum
CSERC Chhatisgarh State Electricity Regulatory Commission
DERC Delhi Electricity Regulatory Commission
ECAC Electricity Consumer Advocate Committee
ERC Electricity Regulatory Commission
FOR Forum of Regulators
GERC Gujarat Electricity Regulatory Commission
HERC Haryana Electricity Regulatory Commission
HPERC Himachal Pradesh Electricity Regulatory Commission
J&KSERC Jammu & Kashmir Electricity Regulatory Commission
JSERC Jharkhand State Electricity Regulatory Commission
KERC Karnataka Electricity Regulatory Commission
KSERC Kerala State Electricity Regulatory Commission
LDA Lucknow Development Authority
MERC Maharashtra Electricity Regulatory Commission
MPERC Madhya Pradesh Electricity Regulatory Commission
MSERC Meghalaya State Electricity Regulatory Commission
NCT National Capital Territory
NEP National Electricity Policy
NGO Non-Governmental Organization
OCA Office of Consumer Advocacy
OERC Orissa Electricity Regulatory Commission
PSERC Punjab State Electricity Regulatory Commission
RERC Rajasthan Electricity Regulatory Commission
RI Reliability Index
SERC State Electricity Regulatory Commission
TERC Tripura Electricity Regulatory Commission
TERI The Energy and Resource Institution
TNERC Tamil Nadu Electricity Regulatory Commission
TP Tariff Policy
UERC Uttarakhand Electricity Regulatory Commission
UPERC Uttar Pradesh Electricity Regulatory Commission
VOICE Voluntary Organization in Interest of Consumer Education
WBERC West Bengal Electricity Regulatory Commission
Forum of Regulators
Protection of Consumer Interest Appendix
APPENDIX
Forum of Regulators
Protection of Consumer Interest APPENDIX-I
Sir,
The Forum of Regulators ( FOR ) decided in its meeting held on 13th June, 2008
to constitute a Working Group on “Protection of Consumer Interests”. The Chairperson
of the Forum was authorized to nominate various SERCs on the Working Group.
2. The Chairperson, FOR, has constituted the Working Group as indicated below :-
3. In the SERCs where the post of Chairperson is vacant, the senior Member of the
SERC would be the Member of the Working Group.
4. The Working Group would inter-alia consider the relevant provisions of the
National Electricity Policy, National Tariff Policy, reports of the studies conducted by
TERI, the models of consumer advocacy being followed in various States and would
give its recommendation on -
Forum of Regulators i
Protection of Consumer Interest APPENDIX-I
• The possible options and strategies for consumer education, empowerment and
funding,
5. The Secretariat of the Forum would provide secretariat to the Working Group.
The Working Group would submit its recommendations by 30th September, 2008 for
consideration of the Forum.
Sd/-
( Alok Kumar )
Secretary
To :
Chairperson, CERC/FOR.
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-II
Forum of Regulators i
Protection of Consumer Interest APPENDIX-II
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-II
19. TNERC Notified • The Commission issued Regulations for CGRFs &
Ombudsman which came into force in Feb, 2004;
• Licensees have established CGRFs in all the 38
distribution circles. The Forums have disposed of
382 petitions from July 2006 to June 2007;
• Ombudsman has been functioning from 7.6.2005. 17
petitions have been admitted and all have been
disposed of during 1-1-2007 to 31-12-2007.
20. TERC Notified • CGR formed and Secretary of the Commission
appointed as Ombudsman.
21. UERC Notified • Two CGR and one Ombudsman functional.
22. UPERC December 9, 2003 • Offices of CGR Forum are functional. Ombudsman
has been appointed and is functional. State Govt. has
been requested to expedite sanction of staff for the
office of Ombudsman. On the basis of feedback from
consumers and stakeholders the Commission has
modified these regulations have also been notified.
Action to operationalize the Forum as per new
regulations is in hand.
23. WBER Notified • CGRF has been established at the level of the
C licensees as per the Regulation of Commission;
• Ombudsman operating for more than 3 years has
kept a close watch to ensure that the grievances of
the consumers submitted to the Forum and the cases
of non redressal of the grievances referred to the
Ombudsman are settled expeditiously;
• Out of 1970 cases received, 1726 cases have been
settled and 244 are pending.
Forum of Regulators i
Protection of Consumer Interest APPENDIX-III
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-III
Ombudsman;
• During 2006-07, 1875 cases settled, out of the
total of 2007 cases (including 521 pending cases of
the previous year);
• During 2007-08 (upto September, 2007) 673 cases
settled, out of the total of 790 cases (including 132
pending cases of the previous year);
• Ombudsman appointed;
• Ombudsman conducts proper hearing to decide
cases and also monitors whether decision of
CGRF/Ombudsman being properly implemented.
On non-compliance SERC issues notices to
Discoms;
• Scrutiny of 6 cases settled by each CGRF
undertaken by Ombudsman every month;
• Ombudsman submits six monthly report to SERC;
• Response of licensees towards disposal of
complaints has been satisfactory.
13. MERC • SERC has framed a comprehensive “Electricity
Consumer’s Rights Statement” with the objective
of enabling consumers to protect themselves by
creating awareness about their rights available
and the service as well as the level of quality that
may reasonably expect from the electricity
distribution companies in their respect areas etc;
• Utilities are also directed to spread over awareness
about the consumers grievances redressal
mechanism;
• As per information available, leaflets on
consumers’ awareness were circulated along with
electricity bills and information hoardings have
been displayed of their respect billing
centre/customer care centre about consumer
grievances redressal mechanism.
14. MsER • Regulations on Redressal of Grievances have been
C notified in 2007;
• Ombudsman appointed;
• No cases filed before Ombudsman so far.
15. OERC • CGRFs are operational all over the State since
October, 2004 and Ombudsmen are functioning
since Jan, 2005;
• Procedure for redressal laid down in Regulations
on CGRF and Ombudsman;
• SERC conducts periodic inspection of the
Forum of Regulators iv
Protection of Consumer Interest APPENDIX-III
Forum of Regulators v
Protection of Consumer Interest APPENDIX-III
Forum of Regulators vi
Protection of Consumer Interest APPENDIX-IV
Consumer Advocacy
S. No. SERC Summary
1. AERC 12 Consumer groups have been empanelled under
Consumer Advocacy Cell. A quarterly info bulletin "The
Electricity Consumer Grid" published.
2. BERC Action yet to be taken. However, comments/suggestions of
consumers/ stake holders and general public are invited on
matter relating to tariff determination and finalization of
regulations.
3. CSERC Consumer Advocacy Cell has been set-up in the
Commission. A two day seminar organized for NGO’s on
regulatory regime. A training programme to train members
of NGO’s has been conducted in 2007-08 and is being
conducted during 08-09.
4. DERC Each year with the admission of the Annual Revenue
Requirements (ARR) petitions of the Discoms, the
Commission gives wide publicity among stakeholders and
nominates some of the officers of the Commission for
interaction with the stakeholders for enabling them to
comprehend the content/import of the ARR petitions. This
helps in the stakeholders contributing meaningfully while
offering their comments against the ARR petitions and also
during the subsequent public hearings.
On the initiative of the Commission, the Govt. of NCT of
Delhi have recently notified the Electricity Consumers
Advocacy Committee(ECAC), rendering a platform to the
consumers for protecting their interests before DERC, the
Appellate Tribunal for Electricity and other Courts of the
land
5. GERC Representatives of various consumer groups are made
member of State Advisory Committee as well as Supply
code Review panel.
6. HERC HERC, as provided in section 94(3) may consider
authorizing a person to represent the interest of the
consumers in the proceedings before it.
7. HPERC Consumer representative appointed under the Act to protect
consumer interest.
8. JSERC This is an on going process and the commission is carrying
out required activities.
Forum of Regulators i
Protection of Consumer Interest APPENDIX-IV
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-IV
Forum of Regulators i
Protection of Consumer Interest APPENDIX-V
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-V
supply.
11. KSER • Overall standards of performance specified by
C KSERC;
• Quality of Supply for voltage and frequency is
specified in Kerala Electricity Supply Code, 2005.
12. MPER • Regulation of distribution performance standards
C notified by MPERC on 28.10.2005;
• Quarterly and annual report on performance
standards are published in newspapers/ available
in MPERC website;
• NGOs workshop held by MPERC in August, 2007
to disseminate information on performance
standards amongst consumers;
• Discoms directed by MPERC to display
performance standards at their offices. Field visit
by MPERC to ensure compliance of directions;
• Ombudsman directed to review performance
standards bi-annually;
• As per directions of MPERC, six lakh pamphlets
containing details of performance standards,
distribution along with electricity bills in Bhopal,
Indore and Jabalpur;
• Pre-identified indices like total number of 11KV
feeders, sum of outage duration of all feeders,
outage duration per feeder, number of outage per
feeder, total number of tripping, feeder reliability
index of area etc.;
• Monthly information on power reliability indices,
published in newspapers every year;
• Quality Monitoring Cell constituted in MPERC.
13. MERC • Regulations on Standards of Performance (SoP) viz.
Electricity Supply Code & Other Conditions of
Supply, Terms & Conditions of Tariff and General
Conditions of Distribution License, have been
issued;
• SERC through different orders also gives directives
to utilities for enforcing standards with respect to
quality, continuity and reliability of service,
however, due to sever demand-supply gap in the
State, SERC regulated quantity of supply to ensure
that no category of consumers is discriminated
against;
• Reliability in indices have been specified in the
Regulations on SoP;
• Reports on various indices are hosted by licensees
Forum of Regulators iv
Protection of Consumer Interest APPENDIX-V
Forum of Regulators v
Protection of Consumer Interest APPENDIX-V
schedule outages;
• Reliability indices viz. System Average Interruption
Frequency Index (SAIFI), System Average
Interruption Duration Index (SAIDI) and
Momentary Average Interruption Frequency Index
(MAIFI) specified by the SERC.
22. WBERC • Standards have been laid down by notifying the
allowable periods of unplanned interruption of
supply to consumers to ensure quality, continuity
and reliability of supply;
• Indices on quality of power supply are yet to be
developed which require collection of data (voltage
level of supply, the terrain, climate condition,
salinity of atmosphere and such other natural
characteristics of different localities within the
area of supply of distribution licensee, consumer
mix, the character of various loads under
different categories of consumers, the
predominant mode of supply etc.
Forum of Regulators vi
Protection of Consumer Interest APPENDIX-VI
Forum of Regulators i
Protection of Consumer Interest APPENDIX-VI
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-VII
S. SERC Status
No.
1. AERC A consumer advocacy cell has been set up by the
Commission in Feb 2004. The Cell empanelled 12
consumer groups from all over the states. Three
‘Electricity Consumers Awareness Meet’ were organized
which provides a forum for representatives from
empanelled consumer groups and supplier to interact
among each other and air their views and concerns. Also
direct feedback on power supply and performance of the
Discoms are being gathered from consumers from
different parts of the state and send to the Discom for
action.
2. BERC BERC takes views of consumer groups before finalizing
any regulation, concept paper and tariff orders for
effective representation of consumer groups before the
Commission to enhance the efficacy of regulatory process.
3. CSERC Consumer advocacy cell has been set up for support and
capacity building of consumers. This cell gives wide
publicity to the functioning of Forums and Ombudsman
through media and pamphlets.
The SERC has enlisted the services of a reputed NGO to
create awareness amongst the consumers about their
rights and obligations under the Act. Also there is a
system of registration of NGOs working in the interest of
consumers.
4. DERC The GoNCTD have notified the appointment of Electricity
Consumers Advocate Committee (ECAC) for representing
the interest of consumers in the proceeding before this
Commission as well as other Forums, Appellate Tribunals
for Electricity, Courts, etc.
5. HERC HERC has not authorized any person to represent
interest of the consumers in the proceedings before the
Commission.
6. HPERC Commission has appointed a consumer representative to
represent the common interest of the consumers in all
matters, hearings and proceedings before the
Commission, though the consumers are also free to
represent their views.
Any consumer organization which is registered under the
law of State and having the protection of the interest of
Forum of Regulators i
Protection of Consumer Interest APPENDIX-VII
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-VII
Forum of Regulators iv
Protection of Consumer Interest APPENDIX-VIII
1.1 The Group interacted with Shri Ashok Pendse, President, Mumbai
Grahak Panchayat, Mumbai. Shri Pendse made a presentation
highlighting the initiatives taken by Mumbai Grahak Panchayat and
Prayas in Maharashtra relating to consumer education and consumer
advocacy. He suggested a three stage strategy for dissemination of
information and consumer education. The first stage involves training of
select few persons capable of handling cases in Regulatory Commissions,
Appellate Tribunals, High Courts and Supreme Court. The middle group
(consisting of about 50-60 persons a state) capable of handling routine
complaints related to billing, meters, connection and disruption of supply
etc. The lower end group (consisting of about 3000-5000 people)
involving villages, remote districts etc. to be trained by the middle group.
He also emphasized the need for financial support for consumer
groups/NGOs for fighting cases at Appellate Tribunal, High Courts and
Supreme Court, as the costs of fighting cases are substantial. A copy of
the presentation made by Shri Pendse is enclosed as Annexure-1.
Forum of Regulators i
Protection of Consumer Interest APPENDIX-VIII
2.2 The following were the main points of discussion subsequent to the
presentation:
• The models being adopted by TRAI and SEBI for funding the
consumer advocacy could also be studied.
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-VIII
• 80% of the grievances have already been decided out of which 66%
have been decided in favour of consumers. 518 grievances were not
decided in favour of consumers by the CGRFs for various reasons.
Out of this, 267 consumers approached the Ombudsman. 41% of
these 267 cases were decided by the Ombudsman in favour of
consumers.
Forum of Regulators iv
Protection of Consumer Interest APPENDIX-VIII
Forum of Regulators v
Protection of Consumer Interest APPENDIX-VIII
Forum of Regulators vi
Protection of Consumer Interest APPENDIX-VIII
• Main points of the SOPs and the rights of the consumers needed to
be widely disseminated by printing them on the backside of
electricity bills in vernacular language mandatorily.
• The consumer should not be required to pay any fee for filing their
grievances before the CGRFs.
Presentation on
Consumer Advocacy
By
Ashok Pendse
Mumbai Grahak Panchayat
Forum of Regulators 1
Protection of Consumer Interest Annexure-I
Financial Support
Forum of Regulators 2
Protection of Consumer Interest Annexure-I
Financial Support
Financial Support
Forum of Regulators 3
Protection of Consumer Interest Annexure-I
Thank You
Forum of Regulators 4
Protection of Consumer Interest Annexure-II
Presentation on
Consumer Advocacy & Protection of Consumer
Interests in Electricity Sector
Y.G. Muralidharan
Consultant (Consumer Advocacy)
KERC, Bengaluru
8th August, 2008
Forum of Regulators 1
Protection of Consumer Interest Annexure-II
Consumer Protection
Models
Information
Consultation
Participation
Decision Making
Empowerment
Forum of Regulators 2
Protection of Consumer Interest Annexure-II
Consumer Protection
Models
Consumer Protection
Models In-house
Forum of Regulators 3
Protection of Consumer Interest Annexure-II
Energywatch, UK
Forum of Regulators 4
Protection of Consumer Interest Annexure-II
Types of advocacy
- Policy Advocacy
- Individual Advocacy
- Group Advocacy
Forum of Regulators 5
Protection of Consumer Interest Annexure-II
Forum of Regulators 6
Protection of Consumer Interest Annexure-II
Information dissemination
Capacity building / Training
Representation
Grievance handling
Networking
Review / monitoring
Forum of Regulators 7
Protection of Consumer Interest Annexure-II
Activities of OCA
OCA - Activities
Forum of Regulators 8
Protection of Consumer Interest Annexure-II
OCA - Activities
Visits to ESCOMS
Review of Standard of Performance
Petition in HC / ATE
Petition before Commission
Promoting Electricity consumers
network
OCA - Achievements
Forum of Regulators 9
Protection of Consumer Interest Annexure-II
Challenges
Forum of Regulators 10
Protection of Consumer Interest Annexure-II
Forum of Regulators 11
Protection of Consumer Interest Annexure-III
Steps required to make functioning of the Forums for Redressal of Consumer Grievances
and Ombudsman more effective.
The Electricity Act, 2003 casts a duty on the Distribution Licensees to establish
Forums for redressal of grievances of consumers, which is mandatory. The word "shall"
used in sub-section (5) of Section 42 of the Electricity Act and sub-rule (1) of Rule 7 of the
Electricity Rules, 2005 makes it amply clear that the Distribution Licensees have to
compulsorily establish Forums for redressal of consumer grievances. Similarly, it is also
mandatory for the Electricity Regulatory Commissions to nominate o< designate
Ombudsman as an Appellate Authority over the Forums. The role of the Regulatory
Commissions in the functioning of these Forums and Ombudsman is crucial.
The creation of the Regulatory Commissions at the Central and State level is
looked upon by the consumers as an opportunity to seek redressal for their grievances in
respect of supply of power given by the power utilities. The quality of power supply being
poor by any standards, there have been a large number of complaints against the service
Forum of Regulators
Protection of Consumer Interest Annexure-III
rendered by the utilities. There is a tradition in India to seek redressal at the highest level
without even going through the normal channels where grievances could have been
redressed. Therefore, the Commissions have to ensure that clear instructions for systematic
handling of grievances have to been given by the licensees, especially the Distribution
Licensees.
In our system the supply is 'far' stretched and there would be a lot of problems. It
would not be possible to satisfy all consumers. Therefore, Standards of Service which can
be practiced should be fixed with reference to ground realities and published and made
available. If this is not there, the Regulatory Commissions should insist on such a
Statement being made by the Distribution Company.
These Standards of Service will be basis for deciding the 'consumer' grievance and
how it should be redressed. What would be the penalties that the Distribution Company
would suffer if it does not confirm to the promised standards has to be indicated. APERC
notified Licensees Standard of Performance (Regulation No.7/2004) prescribing
compensation payable to consumers for non-compliance of the standards in terms of
Section 57 of the Electricity Act, 2003 and published in the Gazette of A.P.
Possible options and strategies for consumer education, empowerment and funding.
Awareness among the electricity consumers of their right to get adequate supply of
electricity on demand as mandated under Section 43 of Electricity Act 2003 need to be
increased by educating the consumers of such rights. Statements on the existing situation,
promises made in the Citizens Charter or Service Standards prescribed/related to supply of
electricity by the Distribution Licensees etc., need to be published and popularized so as to
reach the people at large. Some of the grievances arise on account of indifference of the
Forum of Regulators
Protection of Consumer Interest Annexure-III
field staff who are in direct contact with consumers like linemen, meter readers, billing
personnel etc. A great deal of effort has to be made to educate these people and in bringing
about the required mindset change. The utility personnel should be made to understand the
needs of the consumers and at the same time are able to educate the consumers through
meetings, discussions etc., as some of their grievances are due to inadequate appreciation
of the problems of the utility.
The ground realities indicate that some of the grievances are due to poor equipment
or overall shortage of power in the system, which can neither be remedied nor field staff
made responsible. These situations should be tackled by having clearly published
statements on the existing situation and by moderating the promises made in the Citizen
Charter or Service Standards. Thus, continuous interaction with consumers is the first and
foremost requirement, which automatically becomes part and parcel of consumer education
and empowerment. APERC notified Consumers' Right to Information Regulation, 2000
wherein inter-alia it is stated that the licensees shall provide free of charge to all the new
consumers at the time of release of supply, copies of Consumer Rights Statement, Code of
Practice on payment of bills and Complaint Handling Procedures. Other persons may also
purchase copies of the above documents at a reasonable cost of duplication.
Forum of Regulators
Protection of Consumer Interest Annexure-III
Institionalizing Consumer Advocacy:
Apart from advocating lower rates for all customers of the electricity utilities, etc.
the other important objective of Consumer Advocacy is to provide for better service.
Forum of Regulators
Protection of Consumer Interest Annexure-III
Methodology for meeting the financial requirements of the office of the Ombudsmen so
as to ensure its independence from the distribution licensees:
The Regulations mentioned above may be accessed from the website of APERC
www.ercap.org
Forum of Regulators
Protection of Consumer Interest Annexure-III
Vidyut Ombudsman
Forum
Each distribution licensee is required to establish a Forum for redressal of grievances
consumers as required u/s 42 (5) of the Electricity Act 2003, which is extracted he under:
Section 42(5):
"Every distribution licensee shall, within six months from the appointed
date or date of grant of licence, whichever is earlier, establish a forum for
redressal of grievances of consumers in accordance with the guidelines as
may be specified by the State Commission.”
Ombudsman
The Appeals arising out of the decisions of these Forums lie with the Ombudsman wl
has to settle the grievances of consumer as per the Regulations of the Commission vide
Section 42 (6) and 42 (7) of the Act which are extracted here under:
Section 42(6):
"Any consumer, who is aggrieved by non-redressal of his grievances under
sub-section (5), may make a representation for the redressal of his
grievance to an authority to be known as Ombudsman to be appointed or
designated by the Sate Commission.”
Section 42(7):
" The Ombudsman shall settle the grievance of the consumer within such
time and in such manner as may be specified by the State Commission. "
Forum of Regulators
Protection of Consumer Interest Annexure-III
2. Regulations of the Commission:
Pursuant to the statutory provisions mentioned above, the A.P. Electricity Regulatory
Commission notified the Regulation called The Andhra Pradesh Electricity Regulatory
Commission (Establishment of Forum and Vidyut Ombudsman for redressal of grievances
of the consumers) Regulation 2004 (No. 1 of 2004) in the A.P. Extra Ordinary Gazette
No.21 dated 26-02-2004. The said Regulation specifies the functions, and procedure for
representation, procedure for settlement by agreement, by award and the reports to be
submitted which are briefly described here under:
(j) The consumer aggrieved by the decision of the Forum has to file appeal within 30
days - Ombudsman may relax this period
……………….clause (1) and its proviso
(k) Ombudsman's decision whether the complaint is fit for being considered or not
shall be final
……………………………..clause 9 (2)
(l) Ombudsman shall not entertain any matter which is before the Commission or any
other authority including under parts X, (Commissions), XI (Tribunal), XII
(Enquiry and Enforcement), XIV (Offences & Penalties), and XV (Special Courts),
of the Act
(m) Ombudsman shall in the first instance act as a counsellor and mediator
…………………clause 8 (1) (c)
(n) When a complaint is settled through mediation of the Ombudsman, he shall make a
recommendation which shall be sent to the complainant and the Licensee for
acceptance within 15 days ……………...clause 11 (3), (4)
(o) If the complaint is not settled by agreement with in 30 days or any extended period,
the Ombudsman shall pass an award with in 3 months from the date of (p) receipt
of complaint giving reasons for the decision made, after giving an opportunity of
Forum of Regulators
Protection of Consumer Interest Annexure-III
being heard
……………………..clauses 9 (5), 12 (l)i, (2) (3)
(q) The complainant has to inform the licensee, of his acceptance of the award with in
a month. The Licensee has to comply with the award with in 15 days of receipt of
acceptance of complainant and inform the Ombudsman of its compliance of the
award
........ clause 12 (16), (7)
(r) If the complainant does not communicate the acceptance, the Licensee need not
implement the award ……………clause 12(8)
(s) The Ombudsman is required to submit quarterly report with in 15 days of end of
each quarter and Annual Report by 31st May of every year on the activities on the
preceding year …………clause 16 (1), (2)
As per Para 7 of the Electricity Rules 2005 notified by Government of India in the
notification No. G.S.R. 379 (E) Act dated 08-06-2005, the Ombudsman has to submit half-
yearly reports to the State Commission and the State Government with in 45 days after end
of each half-year giving details of nature of grievances, response of Licensees, opinion of
Ombudsman, on compliance of Standards of Performance of Licensees specified by the
Commission u/s 57 of the Act.
The institution of Vidyut Ombudsman was established in September' 2005 pursuant to the
Commission's proceedings No. Secy/04, dt 19-09-2005 designating the Director (Law) of
the Commission as Ex-officio Electricity Ombudsman for the state pending notification of
the Regulation on the terms and conditions of service of Ombudsman and his staff.
Subsequently the Commission designated Sri. S.Surya Prakasa Rao, Secretary, APERC as
the Ex-officio Electricity Ombudsman in place of Dir(Law), vide proceedings No. 345/A-
184/2005 dt 26-11-2005. Subsequently, vide proceedings APERC/ A-185/2007/2; dt: 11-
Forum of Regulators
Protection of Consumer Interest Annexure-III
Forum of Regulators
Protection of Consumer Interest Annexure-III
Forum of Regulators
Protection of Consumer Interest Annexure-IV
Presentation on
Functioning of Consumer Grievance
Redressel Mechanism under the
EA 2003
to
FOR Working Group on
Protetion of Consumer Interests
The Context
The provisions of Electricity Act 2003 have come into
force more than 4 years back
Section 42 (5) requires every distribution licensee to
establish consumer forums as per the guidelines
specified by the SERCs
Section 42 (6) provides for appointment of an
ombudsman by the SERC for redressel of consumer
aggrieved by non-redressel of grievances under
Section 42 (5)
Question was to examine the working of the
consumer forums across various states
In this background, the study was entrusted to
ASCI by the MOP to cover 15 states in the five
regions 2
Forum of Regulators 1
Protection of Consumer Interest Annexure-IV
Scope of Study - I
The study covers the following States:
Southern Region Kerala, Andhra
Pradesh & Tamil Nadu
Western Region Gujarat, Chhattisgarh
& Madhya Pradesh
Northern Region Uttar Pradesh, Punjab
& Delhi
Eastern Region West Bengal, Orissa &
Jharkhand
North Eastern Region Assam, Tripura &
Meghalaya 4
Forum of Regulators 2
Protection of Consumer Interest Annexure-IV
Scope of Study - II
To examine the:
– the structure of the Forums set by the Licensees in various
States.
– The distribution of Forums across the jurisdiction of a
licensee and adequacy of the number of the Forums for
serving the consumers.
– Number and nature of grievances being filed by the
consumers before the Forum.
– The status of disposal and average time taken by the
Forums to dispose consumer grievances.
– The breakup (based on the nature of grievances) of the
grievances which remained non-settled at the level of
Forums and in which the consumers had to approach
Ombudsman.
– Status of disposal and average time taken for settling the
grievance by the Ombudsman in various States.
– The status of submission of six monthly reports by the
Ombudsman to State Government and SERCs.
– Action, if any, taken by the SERCs on the basis of the 5
reports of the Ombudsman and its impact.
Study
Forum of Regulators 3
Protection of Consumer Interest Annexure-IV
No of Licensees
Number of Distribution licensees
SN State Public sector Private Remarks
Total
DISCOMs sector
1 Andhra Pradesh 4 - 4
2 Tamil Nadu 1 - 1 SEB
3 Kerala 1 7 8 SEB
4 Gujarat 4 1 5
5 Chhattisgarh 1 - 1 SEB
6 Madhya Pradesh 3 - 3
7 Uttar Pradesh 4 2 6
8 Punjab 1 - 1 SEB
9 Delhi 1 3 4
10 West Bengal 2 3 5
11 Jharkhand 2 2 4 SEB
12 Orissa - 4 4
13 Assam 3 - 3
14 Meghalaya 1 - 1 SEB
15 Tripura 1 - 1 State Power Corporation
16 Total 29 22 51
Note: All above states have forums/ Meghalaya is setting up a forum 7
All states have appointed/ designated an Ombudsman
SERC Regulation
Forum of Regulators 4
Protection of Consumer Interest Annexure-IV
Structure of Forums
A.P. Tamil Nadu, Kerala, Three member forums
Gujarat, Madhya Pradesh,
Delhi, Orissa, Jharkhand,
Punjab & Assam
West Bengal Single member forum, officer at Circle/
regional and corporate level is
“Consumer Grievance Redressel Officer”
Uttar Pradesh 2 member forum; regulations revised to
provide for 3 member forum
Chhattisgarh 2 member forums, regulations revised in
Dec 2007 to provide for 3 member forum
Meghalaya Process of establishing a forum
Tripura No independent forum but a three tier
departmental forums at sub-division,
division and head quarters levels for
disposing grievances
Composition of Forums – I
In general:
– One Member shall be an Electrical Engineer not
below the rank of Superintending Engineer in
service or retired.
– One Member shall be qualified in legal or financial
/ accounts disciplines either an officer in service or
retired.
– The third Member shall be from a registered
consumer association / organization.
10
Forum of Regulators 5
Protection of Consumer Interest Annexure-IV
Composition of Forums – II
Exceptions:
Andhra Pradesh:
– The three Member Forums have an Engineer, a finance member
and a member with legal background. The Forum has to co-opt a
fourth member from a registered consumer organization /
association, but without voting rights.
Jharkhand
– the Commission specified a three member Forum with one
engineer, one person with legal/judicial background and one with
finance / accounts background, but no representation to consumers
organization/association. None shall be working officers of the
licensee.
Madhya Pradesh
– has specified that any person who is currently in the employment of
licensee shall not be eligible to be appointed as Chairperson or
member for two years after leaving the service
West Bengal
– In a single member Forum the Superintending Engineer or senior
officers of the operation circle / region would be Chairperson / 11
Member.
12
Forum of Regulators 6
Protection of Consumer Interest Annexure-IV
Appointment of Chairman/
Member of Forums
In most states, the licensee appoints the
Chairperson and Members of the Forum
In some cases, the Commission obtains
a panel of names from the licensee and
approves them and the Forum
Chairman/ members are appointed by
the licensee
13
Forum of Regulators 7
Protection of Consumer Interest Annexure-IV
Forum of Regulators 8
Protection of Consumer Interest Annexure-IV
17
ASCI Observations
All the Commissions have specified similar
procedures for handling of complaints, only
Jharkhand and Uttar Pradesh Commissions have
specified some fee(s) Rs.50 to be paid along with the
complaint, no such fee(s) is specified by the other
Commissions.
Some Commissions have set period for disposal of
grievance at 45 days, some at 60 days and some at
90 days from the date of receipt of complaint.
All the Forums are following the procedure laid down
by the respective Commissions, in the guidelines.
18
Forum of Regulators 9
Protection of Consumer Interest Annexure-IV
No of Grievances
Number of Grievances Filed
State 2008 (Upto Total
2004 2005 2006 2007
Mar/08)
Andhra Pradesh - 190 672 471 - 1333
Tamilnadu 372 708 730 829 136 2775
Kerala - - 337 266 35 638
Gujarat - 265 569 531 - 1365
Madhya Pradesh 278 2634 1999 1227 364 6502
Chhattisgarh - 22 90 142 - 254
Delhi 821 1313 1380 1290 - 4804
Uttar Pradesh+ 151 273 373 437 - 1234
Punjab - - 240 156 41 437
Orissa 1608 2604 1789 1665 531 8197
West Bengal - 4090 5481 4602 - 14173
Jharkhand - - 68 47 14 129
Assam - - 3 7 1 11
Meghalaya *
Tripura **
19
+ Data pertains to Meerut and Agra DISCOMs.; *Forum is yet to be established.
** Officers at sub-division, division and head quarters are designated as Forums. No proper records are maintained.
Nature of Grievances
i) Billing related Billing errors, back billing etc.
Forum of Regulators 10
Protection of Consumer Interest Annexure-IV
ASCI Observations
Wide publicity in the media, on the electricity
consumption bills served to the consumers etc., is
required to create awareness to the consumers about
the Forums and their role in redressing consumer
grievances.
In almost all States about 20 to 70% of grievances
are billing related, 8 to 28% are metering related, 2 to
10% are supply related and others are on various
other issues.
If the licensees could pay more attention to billing
and metering related issues, the number of
grievances / complaints filed would drastically come
down.
In some States the number of grievances have come
down over years probably because of better service
to the consumers by the licensees. 21
Forum of Regulators 11
Protection of Consumer Interest Annexure-IV
Ombudsman
In most of the States, an independent person is
appointed as Ombudsman.
In Andhra Pradesh, Gujarat, Assam and Tripura one
of the officers of the Commission is designated as
Ombudsman by the respective Commissions.
Ombudsmen are mostly retired senior officers and
persons of stature and rich experience in the
respective disciplines and good track record in
service in the related fields and are able to carryout
the job efficiently and effectively.
They are provided office accommodation and other
facilities required to work effectively and efficiently.
Even the officers designated by the Commission are
either serving senior officers or officers retired at 23
senior level.
Forum of Regulators 12
Protection of Consumer Interest Annexure-IV
Independence – ASCI
Observations
Ombudsman:
– neither the Commission nor the licensee or State Government
interfere in their work and they are free to take decisions and give
awards based on merits of the case.
Forums
– Wherever the Forums are headed by independent persons, (not
serving officers of the licensee), it could be said they are working
independently without any interference from any quarters.
– Wherever serving officers are appointed it is not possible to say
prima-facie whether they act independently when they have to take
decisions in favour of consumers particularly where monetary
issues are involved such as refund of money to consumers etc.
SERCs do not interfere in the working of Ombudsman and
Forum.
The Commission reviews the functioning of the Ombudsman
and Forums periodically and communicates its comments and
also convenes meetings of Ombudsman, Forums and licensees
to review and discuss the functioning of the Forums. 25
Forum of Regulators 13
Protection of Consumer Interest Annexure-IV
27
28
Forum of Regulators 14
Protection of Consumer Interest Annexure-IV
29
30
Forum of Regulators 15
Protection of Consumer Interest Annexure-IV
Forum of Regulators 16
Protection of Consumer Interest Annexure-IV
33
Forum of Regulators 17
Protection of Consumer Interest APPENDIX-IX
Hon'ble Judges:
F.I. Rebello and Anoop V. Mohta, JJ.
Counsels:
Acts/Rules/Orders:
Electricity Act, 2003 - Section 56, 56(1) and 56(2); Maharashtra Electricity Regulatory Commission
Regulations, 2006
JUDGMENT
F.I. Rebello, J.
2. The petitioner had applied for electric connection from respondent No. 1. Respondent No. 1
commissioned meter No. 2759592 on the petitioner's premises on 3rd January, 2003 for connected load
of 125 HP (93.25 KW). The petitioner started using electricity since 30th August, 2003. Bills for the period
from 30th August, 2003 to 30th October, 2003 and also subsequent bills till November, 2005 were sent to
the petitioner indicating multiplying factor of one. Respondent No. 1 around November, 2003 during
energy audit observed that petitioner was billed by applying incorrect multiplying factor since beginning,
the correct multiplying factor being 40. Supplementary bill was preferred in January, 2006 for Rs.
12,33,328/-.
3. The petitioner contested the said bill by filing a complaint before Consumer Redressal Forum on 6-3-
2006. On 25-3-2006 as the petitioner had not paid electric dues in terms of the bill, respondent No. 1
issued notice of disconnection but withdrew the same. On 5-5-2006 the Consumer Redressal Forum
passed an order against petitioner against which petitioner preferred appeal before the Electricity
Ombudsman. The Electricity Ombudsman partly allowed the appeal and directed to recover amended
dues under Section 56(2) of the Electricity Act, 2003 (hereinafter referred as "Electricity Act". Respondent
Forum of Regulators i
Protection of Consumer Interest APPENDIX-IX
No. 1 on 24-7-2006 made demand on the petitioner in a sum of Rs. 11,48,844/-. On 24-7-2006 itself, a
notice of disconnection was issued demanding arrears of Rs. 13,17,141.13 paisa after some
correspondence as no relief was given to the petitioner. The petitioner filed writ petition before this Court
being Writ Petition (L) No. 1866 of 2004 challenging the notice of disconnection. In the meantime on 16-
8-2006 respondent No. 1 amended earlier demand as the demand was not in conformity with the order of
the Electricity Ombudsman. As petition became infructuous, liberty was granted to withdraw the petition
with liberty to file fresh petition. The petitioners once again by letter of 30th August, 2006 called
respondent No. 1 and 2 to withdraw their claim. The petitioner received a third notice of disconnection
issued by respondent No. 1 on 4-9-2006 and consequently the present petition.
4. At the hearing of this petition, the learned Counsel for the petitioner has submitted as under:
(i) Whether Electricity Ombudsman can pass order restrospectively covering a period from
December, 2003 when the Electricity Ombudsman is established in the month of December,
2004.
(iii) Whether the Electricity Ombudsman has jurisdiction to pass impugned order dated 18th
July, 2006 allowing back billing for 23 months by amending bills and the regulation system
of MERC Regulations, 2006 or part of the disputes have been referred to MERC.
5. For the purpose of considering the controversy what is relevant are the provisions of Section 56
of the Electricity Act which we are gainfully reproducing for the purpose of deciding the issued that
have been raised by the petitioner herein.
56. Disconnection of supply in default of payment.- (1) Where any person neglects to pay
any charge for electricity or any sum other than a charge for electricity due from him-to a
licensee or the generating company in respect of supply, transmission or distribution or
wheeling of electricity to him, the licensee or the generating company may, after giving not
less than fifteen clear days' notice in writing, to such person and without prejudice to his
rights to recover such charge or other sum by suit, cut off the supply of electricity and for
that purpose cut or disconnect any electric supply line or other works being the property of
such licensee or the generating company through which electricity may have been supplied,
transmitted, distributed or wheeled and may discontinue the supply until such charge or
other sum, together with any expenses incurred by him in cutting of and reconnecting the
supply, are paid, but no longer:
Provided that the supply of electricity shall not be cut off if such person
deposits, under protests,-
(b) the electricity charges due from him for each month
calculated on the basis of average charge for electricity paid by
him during the preceding six months, whichever is less, pending
disposal of any dispute between him and the licensee.
(2) Notwithstanding anything contained in any other law for the time being in
force, no sum due from any consumer, under this section shall be recoverable
after the period of two years from the date when such sum became first
due unless such sum has been shown continuously as recoverable
as arrears of charges for electricity supplied and the licensee shall not cut off
the supply of the electricity.
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-IX
6. Insofar as first issue is concerned, the power to recover is under Section 56 of the Act. A temporary
absence or non-appointment of an Electricity Ombudsman cannot defeat the right which otherwise can
be claimed by respondent No. 1. Once there be a power and assuming that vacancy of Electricity
Ombudsman or Electricity Ombuds man itself has been appointed in December, 2004, would not mean
that the authority having jurisdiction is precluded or prohibited from effecting recoveries for the period
prior to its appointment. The recovery will, however, be subject to the bar of limitation as contained in
Section 56. The Electricity Ombudsman therefore would while exercising jurisdiction, issue an order even
in respect of dues which have become due and payable before the establishment of the post of Electricity
Ombudsman in December, 2004. The first issue, therefore, has to be rejected.
7. We then come to the next issue as to whether the demand made by respondent No. 1 is contrary to
the provision of Section 56 of the Electricity Act. We have already narrated the facts. The Electricity
Ombudsman by his order of 18th July, 2006 held that the respondent No. 1 is entitled to recover past
dues by correcting multiplying factor. The question posed by the Electricity Ombudsman to itself was
whether the recovery could be made for the entire period of 26 months i.e. for a period from October,
2003 to November, 2005 and that too belatedly in January, 2006. After considering the various provisions
including the regulations, the Ombudsman held, only those charges for a period of two years previous to
the demand could be recovered and that the arrears for the consumption in January, 2004 became first
due in February, 2004 as supplementary bill was raised in 2006 and these dues having been within two
years are recoverable under the provisions of Section 56(2) of the Electricity Act.
Submission of counsel for the petitioner is that the provisions of Section 56 do not empower respondent
No. 1 to recover any amount if the period of two years has elapsed no can electricity supply be cut off for
nonpayment of those dues. In other words what is sought to be contended is that if the demand or part of
the demand is time barred the provisions of Section 56 would not be attracted. We are afraid, we cannot
subscribe to that proposition. Section 56(1) is a special provision, enabling the generating company or the
licensee to cut-off supply of electricity until such charges or sum as demanded under Section 56(1) is
paid. Relying on Sub-section (2), it was strenuously urged that Section 56(1) cannot be resorted to after
the period of two years from the date when such demand became first due. In our opinion, Sub-section
(2) only provides alimitation, that the recourse to recovery by cutting of electricity supply is limited for a
period of two years from the date when such sum became due. As long a sum is due, which is within two
years of the demand and can be recovered, the licensee of the generating company can exercise its
power of coercive process of recovery by cutting-of electricity supply. This is a special mechanism
provided to enable the licensee or the generating company to recover its dues expeditiously. The
Electricity Act has provided that mechanism for improvement of supply of electricity and to enable the
licensee or generating company to recover its dues. Apart from the above mechanism, independently it
can make recovery by way of a suit. In our opinion, therefore, the impugned order passed by the
Electricity Ombudsman does not suffer from any error apparent on the face of the record and
consequently there is no merit in this petition.
8. For all the aforesaid reasons Rule discharged. In the circumstances of the case, however, there
shall be no order as to costs.
th
Dated: 14 November, 2006.
Present: Hon’ble Mr. Justice Anil Dev Singh, Chairperson
Hon’ble Mr. A. A. Khan, Technical Member
IN THE MATTER OF:
Appeal No. 202
Versus
Versus
Forum of Regulators i
Protection of Consumer Interest APPENDIX-X
5. While the matter was pending with the Commercial Department of the
appellant, during the audit process it was detected that a sum of Rs.
4,28,034/- worked out on the basis of the inspection report has not
been debited to the account of the first respondent. As a consequence,
on 19.04.2005, the appellant raised a demand notice for the sum of
Rs. 4, 28,034/- and was advised to file their objections, if any, within
15 days or else the aforesaid amount shall be debited to their
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-X
account. The first respondent did not agree with the additional
demand and asked for details of the charges which was provided to
them by the appellant by a communication dated 10.05.2005.
7. Objections against the demand of the appellant were raised by the first
respondent before the Electrical Inspector under Regulation No. 39 (1)
of the Rajasthan Electricity Regulatory Commission (Electric Supply
Code & Connected Matters) Regulations, 2004 and under condition
No. 49 of the Terms and Conditions for Supply of Electricity- 2004
read with Section 56 (2) of Electricity Act 2003. The appellant filed
their reply and raised preliminary objection with regard to the
jurisdiction of the electrical Inspector in the matter.
8. The Electrical Inspector after hearing both the parties set aside the
demand raised by the appellant on the ground of it being raised
beyond the limitation period as provided under Section 56 (2) of
Electricity Act 2003 read with Regulation 39 (1) of the Regulations,
2004 and Condition No. 49 of the Terms and Conditions of Supply of
Electricity, 2004 and declared the disconnection notice dated
22.08.2005 issued by the appellant as invalid and quashed the same.
12. Also the provision of Condition No. 49 of the Terms and Conditions of
Supply of Electricity 2004 stipulates as under:
“49. Recovery of old dues:
No sum due from any consumer on account of charges for electricity
or any sum other than a charge for electricity shall be recoverable
after a period of two years from the date when such sum became
first due, unless such sum has been shown continuously as arrears
and the Nigam shall not cut off supply of electricity”.
13. From the above, it may be seen that the aforesaid provisions of the
Electricity Act 2003, the Regulations of 2004 and the Terms and
Conditions for supply of Electricity, 2004 are identical and the case
hinges on the interpretation of Section 56 (2) of Electricity Act- 2003.
14. We have heard the learned counsel for the parties. The basic
question for determination is what is the meaning of the words ‘first
due’ occurring in Section 56(2) of the Electricity Act 2003; Regulation
39(1) of the Regulations, 2004 and condition No. 49 of the Terms
and Conditions for supply of Electricity, 2004. In case the words
‘first due’ is construed as meaning consumption, it would imply that
the electricity charges would become due and payable, the moment
electricity is consumed. In that case failure to pay charges will entail
consequences leading to disconnection of electricity to consumers
even though the consumer will only know the units consumed by
him and will not know the exact amount payable by him as per the
approved tariff as the actual computation depends upon different
parameters such as peaking/non-peaking rates; HT/LT rates etc.
The responsibility to determine the amount payable by the consumer
Forum of Regulators iv
Protection of Consumer Interest APPENDIX-X
16. In H.D. Shourie vs. Municipal Corporation of Delhi, AIR 1987 Delhi
219, the Delhi High Court has ruled that electricity charges become
first due after the bill is sent to the consumer and not earlier thereto.
In this regard the High Court held as under:
“A bill for consumption of electricity can be sent even three
years after the electricity has been consumed. The electricity
charges become due after the bill is sent and not earlier. This
being so, the proviso to S. 455 of Act (66 of 1957) will apply
only when the bill has been sent and the remedy available
with the licensee for filing a suit to recover the said amount
would come to an end after three years elapse after the
electricity charges have become due and payable. To put it
differently, the provisions of S. 455 would come into play after
the submission of the bill for electricity charges and not
earlier”.
The judgement further holds that,
“The amount of charges would become due and payable only
with the submission of the bill and not earlier. It is the bill
which stipulates the period within which the charges are to be
paid. The period which is provided is not less than 15 days
after the receipt of the bill. If the word “due” in S. 24 is to
mean consumption of electricity, it would mean that electricity
charges would become due and payable the moment
Forum of Regulators v
Protection of Consumer Interest APPENDIX-X
17. Thus, in our opinion, the liability to pay electricity charges is created
on the date electricity is consumed or the date the meter reading is
recorded or the date meter is found defective or the date theft of
electricity is detected but the charges would become first due for
payment only after a bill or demand notice for payment is sent by
the licensee to the consumer. The date of the first bill/demand
notice for payment, therefore, shall be the date when the amount
shall become due and it is from that date the period of limitation of
two years as provided in Section 56(2) of the Electricity Act, 2003
shall start running. In the instant case, the meter was tested on
03.03.2003 and it was allegedly found that the meter was recording
energy consumption less than the actual by 27.63%. Joint
inspection report was signed by the consumer and licensee and
Forum of Regulators vi
Protection of Consumer Interest APPENDIX-X
18. Though we have held that the amount due from the appellant is not
barred by limitation and is recoverable, yet at the same time, we
regretfully recognize that it was a serious lapse on the part of the
licensee for having sent a demand notice only on 19.04.2005 to the
consumer after more than 2 years of declaring the meter faulty.
Notwithstanding the fact that the demand is not barred by
limitations, the fact of considerable delay in raising the demand was
against the commercial principles. The licensee ought to have
realized that when such large sums of money are allowed to remain
unrecovered from the consumers for long periods of time, it not only
affects the investment opportunities but also erodes the value of the
principal on account of inflation. The action of the licensee is not in
public interest. It woefully demonstrates the lack of commercial
sense.
19. We would also like to mention that after the appellant furnished the
details of the charges of Rs. 4,28,034/- claimed from the first
respondent on 10.05.2005, the latter submitted its own calculation,
based on arrears for three months, to the appellant stating that the
demand should be of Rs. 1,65,312/- and expressed its willingness to
pay the amount in three equal installments. Thus, the dispute was
not with regard to the liability to liquidate the arrears by the first
respondent but it was concerning the quantum of the liability of the
appellant.
20. It appears the appellant did not accept the offer dated 10.05.2005
made by the first respondent and proceeded to take further actions
to recover the amount of Rs. 4,28,034/- in that the said amount was
debited in the regular electricity bill No. 308 dated 08.08.2005 and
consequent upon its non-payment took coercive action of issuing
notice for disconnection etc. Under the circumstances, the offer
made by the first respondent is no longer alive and can not be legally
enforced
21. In view of the fact that demand raised by the appellant against the
first respondent is not barred by limitation, we allow the appeal and
22. On the basis of the decision rendered in Appeal No. 202 of 2006 and
the meaning ascribed to the words ‘first due’ occurring in Section 56
(2) of the electricity Act, 2003, we allow the appeal and set aside the
impugned order, dated June 21, 2006, passed by the Rajasthan
Electricity Regulatory Commission in Petition No. RERC/91/06, and
remit the matter to the Commission for adjudication of the matter,
in the light of the judgement rendered in Appeal No. 202 of 2006,
and in accordance with law.
th
Dated: 14 November, 2006.
( A. A. Khan)
Member (Technical)
(Justice Anil Dev Singh)
Chairperson
Citing Reference:
* Mentioned
ORDER
R.M. Sahai, J.
Forum of Regulators i
Protection of Consumer Interest APPENDIX-XI
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-XI
It is in two parts. The first deals with goods and the other with
services. Both parts first declare the meaning of goods and
services by use of wide expressions. Their ambit is further
enlarged by use of inclusive clause. For instance, it is not only
purchaser of goods or hirer of services but even those who use the
goods or who are beneficiaries of services with approval of the
person who purchased the goods or who hired services are
included in it. The legislature has taken precaution not only to
define 'complaint', 'complainant', 'consumer' but even to mention
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Protection of Consumer Interest APPENDIX-XI
It was therefore urged that the applicability of the Act having been
confined to moveable goods 'only a complaint filed for any defect
in relation to immoveable goods such as a house or building or
allotment of site could not have been entertained by the
Commission. The submission does not appear to be well founded.
The respondents were aggrieved either by delay in delivery of
possession of house or use of sub-standard material etc. and
therefore they claimed deficiency in service rendered by the
appellants. Whether they were justified in their complaint and if
such act or omission could be held to be denial of service in the
Act shall be examined presently but the jurisdiction of the
Commission could not be ousted because even though it was
service it related to immoveable property.
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Forum of Regulators vi
Protection of Consumer Interest APPENDIX-XI
Forum of Regulators ix
Protection of Consumer Interest APPENDIX-XI
public authorities for their arbitrary and even ultra vires actions
has taken many strides. It is now accepted both by this Court and
English courts that the State is liable to compensate for loss or
injury suffered by a citizen due to arbitrary actions of its
employees. In State of Gujarat v. Memon Mahomed Haji Hasam,
AIR (1961) SC 1885 the order of the High Court directing payment
of compensation for disposal of seized vehicles without waiting for
the outcome of decision in appeal was upheld both on principle of
bailee's, 'legal obligation to preserve the property intact and also
the obligation to take reasonable care of it to return it in same
condition in which it was seized' and also because the government
was, 'bound to return the said property by reason of its statutory
obligation or to pay its value if it had disabled itself from returning
it either by its own act or by act of its agents and servants'. It was
extended further even to bonafide action of the authorities if it was
contrary to law in Lala Bishambar Nath v. The Agra Nagar
Mahapalika, Agra, MANU/SC/0127/1973. It was held that where
the authorities could not have taken any action against the dealer
and their order was invalid, 'it is immaterial that the respondents
had acted bonafide and in the interest of preservation of public
health. Their motive may be good but their orders are illegal. They
would accordingly be liable for any loss caused to the appellants
by their action.' The theoretical concept that King can do no wrong
has been abandoned in England itself and the State is now held
responsible for tortuous act of its servants. The first Law
Commission constituted after coming into force of the
Constitution on liability of the State in Tort, observed that the old
distinction between sovereign and non-sovereign functions should
no longer be invoked to determine liability of the State. Friedmann
observed,
Even M/s. Kasturi Lal Ralia Ram Jain v. State of Uttar Pradesh,
MANU/SC/0086/1964 did not provide any immunity for tortuous
acts of public servants committed in discharge of statutory
function if it was not referable to sovereign power. Since house
construction or for that matter any service hired by a consumer or
facility availed by him is not a sovereign function of the State the
ratio of Kasturi Lal (supra) could not stand in way of the
Commission awarding compensation. We respectfully agree with
Mathew, J., in Shyam Sunder v. State of Rajasthan,
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Protection of Consumer Interest APPENDIX-XI
Forum of Regulators xi
Protection of Consumer Interest APPENDIX-XI
11. Today the issue thus is not only of award of compensation but
who should bear the brunt. The concept of authority and power
exercised by public functionaries has many dimensions. It has
undergone tremendous change with passage of time and change
in socio-economic outlook. The authority empowered to function
under a Statute while exercising power discharges public duty. It
has to act to subserve general welfare and common good. In
discharging this duty honestly and bonafide loss may accrue to
any person. And he may claim compensation which may in
circumstances be payable. But where the duty is performed
capriciously or the exercise of power results in harassment and
agony then the responsibility to pay the lose determined should be
whose? In a modern society no authority can arrogate to itself the
power to act in a manner which is arbitrary. It is unfortunate that
matters which require immediate attention linger on and the man
in the street is made to run from one end to other with no result.
The culture of window clearance appears to be totally dead. Even
in ordinary matters a common man who has neither the political
backing nor the financial strength to match the inaction in public
oriented departments gets frustrated and it erodes the credibility
in the system. Public administration, no doubt involves a vast
amount of administrative discretion which shields the action of
administrative authority. But where it is found that exercise of
discretion was malafide and the complainant is entitled to
compensation for mental and physical harassment then the officer
can no more claim to be under protective cover. When a citizen
seeks to recover compensation from a public authority in respect
of injuries suffered by him for capricious exercise of power and the
National Commission finds it duly proved then it has a statutory
obligation to award the same? It was never more necessary than
today when even social obligations are regulated by grant of
statutory powers. The test of permissive form of grant are over. It
is now imperative and implicit in the exercise of power that it
should be for the sake of society. When the Court directs payment
of damages or compensation against the State the ultimate
sufferer is the common man. It is the tax payers' money which is
paid for inaction of those who are entrusted under the Act to
discharge their duties in accordance with law. It is, therefore,
necessary that the Commission when it is satisfied that a
complainant is entitled to compensation for harassment or mental
agony or oppression, which finding of course should be recorded
carefully on material and convincing circumstances and not
lightly, then is should further direct the department concerned to
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Protection of Consumer Interest APPENDIX-XI
12. For these reasons all the appeals are dismissed. In Appeal No.
6237 of 1990 it is further directed that the Lucknow Development
Authority shall fix the responsibility of the officers who were
responsible for causing harassment and agony to the respondent
within a period of six months from the a copy of this order is
produced or served on it. The amount of compensation of Rs.
10,000 awarded by the Commission for mental harassment shall
be recovered from such officers proportionately from their salary.
Compliance of this order shall be reported to this Court within one
month after expiry of the period granted for determining the
responsibilty. The Registrar General is directed to send a copy of
this order to the Secretary, Lucknow Development Authority
immediately.
13. In Appeal Nos. 6237 of 1990, 5257 of 1990, 3963 of 1989 and
2954-59 of 1992 the appellant shall pay costs to the contesting
respondents which is assessed at Rs. 5,000 in each case. Since
the respondents have not put in appearance in other appeals
there shall be no order as to costs.
Alok Kumar
Secretary CERC & FOR
CERC, Core-3, 6th & 7th floor,
SCOPE Complex, Lodhi Road,
New Delhi-110003
Dear Sir,
1. This is in reference to your letter dated 5.8.2008 bearing no. 15/4(4)/2008-FOR/CERC whereby
you had sought a legal opinion from us. The issue relates to the right of a licensee to be
represented by a legal practitioner in relation to any matters before the Consumer Grievance
Redressal Forum (CGRF) established under sub-section (5) of Section 42 and also before the
Ombudsman under Sub-section (6) of Section 42 of the Electricity Act 2003, specifically where
the aggrieved consumer has not availed the assistance of a legal practitioner in advancing his
case.
2. An important question that arises as a necessary corollary of the present issue is whether such a
restriction imposed on the licensees to engage a legal practitioner would amount to an interference
with the right of Advocates to practice in such forums under section 14 (1) (a), (b) and (c) of the
Indian Bar Council Act, 1926 and also Section 30 of the Advocates Act, 1961.
In the case of Aeltemesh Rein, Advocate, Supreme Court Vs. Union of India & Ors.
reported in 1988 (4) SCC 54, the Hon’ble Supreme Court while dealing with the right of
Advocates to practice before various courts, tribunals and other authorities, made the following
observations which is relevant for the present discussion:
“We have traveled a long distance form the days when it was considered that the
appearance of a lawyer on one side would adversely affect the interest of the parties on
the other side. The Legal Aid and Advice Boards, which are functioning in different
States, can now be approached by people belonging to weaker sections, such as,
Scheduled Castes, Scheduled Tribes, women, Labourers etc. for legal assistance and for
providing the services of competent lawyers to appear on their behalf before the Courts
and Tribunal in which they have cases”.
In view of the increasing number of legal aid committees and cells in every State, the
disadvantageous position faced earlier by litigants with limited resources has lost significance,
which is reflected in the observations of the Supreme Court.
3. The redressal proceeding before the CGRF and Ombudsman under Section 42 (5), (6) & (7) of the
Electricity Act comprises broadly of the following stages:-
Any consumer having a grievance against the concerned distribution licensee files a
representation before the CGRF;
The proceedings before the CGRF are usually conciliatory in nature where the CGRF
tries to settle the matter between the licensee and the consumer through conciliation.
However, where no conciliation is possible, the CGRF passes orders after examining the
comments from the parties and after conducting such enquiry or local inspection as may
be considered necessary and after affording reasonable opportunity of hearing to the
parties and to present respective evidence in favour of their case;
Forum of Regulators i
Protection of Consumer Interest APPENDIX-XII
Any consumer aggrieved by non-redressal of his grievance before the CGRF can make a
representation for redressal of his grievance to the Ombudsman appointed or designated
by the State Commission;
Ombudsman after completing the enquiry of the respective contentions of the parties and
the evidence on record and documents, dispose of the representation of the consumer by a
reasoned order on all issues raised by the consumer.
4. In our view, the Electricity Act, 2003 provides for the establishment of CGRF as an internal self
correcting mechanism within the distribution licensee’s own set-up to redress the grievances of the
Consumers mostly through the process of amicable settlement and conciliation. To that extent,
such proceedings before the CGRF may not be adversarial in nature, and in fact may not even be
proceedings with any legal connotation. Accordingly, in our view it will be legally tenable to
provide by guidelines/ regulations framed by the State Commission, that in respect of the
resolution of the grievances of Consumers through the mechanism of CGRF, both parties (i.e. the
Consumer and the distribution licensee) shall not be represented by lawyers. However, the
position will be different where the guidelines/ regulations framed by the State Commission
provides for a structured adjudicating procedure to be followed by the CGRF. In such a case, the
restriction as to appointment of the advocate/ legal practitioner by parties will have to be viewed in
light of the specific guidelines/ regulations framed by the State Commission.
5. The proceedings before the Ombudsman arise only in such cases where the consumer is aggrieved
by “non- redressal” of his grievance before the CGRF. The Ombudsman decides the respective
contentions of the parties after examining the conflicting stands of the consumer and the
distribution licensee and the documents in relation thereto. In appropriate cases however, effort
may be undertaken by the Ombudsman to settle the issues between the parties.
6. In our view the proceedings before the Ombudsman are likely to be adversarial in nature and may
also involve the recording of evidence between the parties for rendering decision on the dispute,
any restriction imposed on the utilities for engaging lawyers would be contrary to the provisions of
the Advocates Act, and susceptible to challenge before court of appropriate jurisdiction.
7. Section 30 of the Advocates Act entails upon the lawyer the right to carry on its practice at various
Courts, Tribunals and other forums. However, the said section has not yet been brought in to
force. Consequently, at present, the right of an advocate registered on the roles of the Bar Council
is governed by Section 14(1) (a), (b) & (c) of the Indian Bar Council Act, 19261, which is quoted
herein for ready reference:
“14. Right of advocates to practise.- (1) An advocate shall be entitled as of right to practise--
(a) subject to the provisions of sub-section (4) of section 9, in the High Court of which he is
an advocate, and
(b) save as otherwise provided by sub-section (2) or by or under any other law for the time
being in force in any other Court 2*** and before any other Tribunal or person legally
authorized to take evidence, and
(c) before any other authority or person before whom such advocate is by or under the law
for the time being in force entitled to practise.
8. An advocate has a right to appear before any court, or any tribunal or authority legally authorized
to take evidence. Such right of practice of the Advocates cannot be restricted/ denied by any rules
or regulations framed by the Appropriate Commission unless the parent act, i.e., Electricity Act,
1
(1985) 1 SCC 479 – Lingappa Pochanna Appelwar vs State of Maharashtra.
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-XII
2003 has restricted the participation of Advocates in proceedings before Ombudsman.2 The law is
well settled that the rules or regulations framed under a statute should not violate the provisions of
other Acts. The validity of delegated legislation can be challenged on the ground that it is contrary
to provisions of any act other than the parent act.3 In the absence of a specific stipulation in the
Electricity Act, 2003 restricting the right of the lawyers to appear before the Ombudsman, any
regulations framed by the Appropriate Commission in exercise of its power under Section
181(2)(r), (s) read with Section 42(5), (6) and & (7) cannot impose such restriction on the practice
of lawyers before the Ombudsman. Any restriction imposed by the Appropriate Commission on
the right of a licensee to appoint/ engage any lawyer or avail legal assistance in relations to matters
adversarial in natural involving the recording of evidence before the Ombudsman amounts in
effect to a restriction on the lawyers to appear before the Ombudsman in such matters or class of
matters. Such a restriction amounts to a direct interference with the right of the lawyers to practice
in the forums as prescribed in Section 14(1)(a), (b), (c) of the Indian Bar Council Act, 1926. What
cannot be achieved directly cannot be achieved indirectly. Such regulation would be contrary to
the provisions of the Advocates Act and the Indian Bar Council Act, and therefore liable to be
struck down by a Court of competent jurisdiction.
9. The Appropriate Commission while discharging its duties is guided by the interests of consumers.
Having regard to the fact that consumers in certain cases are unable to avail appropriate legal
assistance for pursuing their cases, the Commission may find it appropriate to constitute
Consumer Legal Assistance Cells consisting of lawyers, to provide required legal advice, support
and assistance to consumers, wherever necessary. Such unit would be funded by the utilities.
Further, the extent to which legal expenses of a licensee are incurred towards litigation against any
consumer as an opposite party may be disallowed in the ARR of such licensee. This would be an
equitable and justifiable approach, putting the utilities to bear their own legal expenses in such
matters.
2
Please see Section 36(4) of the Industrial Disputes Act, 1947 which excludes the participation of lawyers
in Labour Courts, Tribunal, etc. Also see Section 13 of the Family Courts Act, 1984 having a similar
clause.
3
(1985) 1 SCC 641 – Indian Express Newspapers vs Union of India
(2006) 4 SCC 327 – Kerala Samasthana Chethu Thozhilali vs State of Kerala
I. RIGHT TO KNOW:
Forum of Regulators i
Protection of Consumer Interest APPENDIX-XIII
IV. METERS:
Forum of Regulators ii
Protection of Consumer Interest APPENDIX-XIII
V. BILLING:
1. Receive bills with such detailed particulars (including due date for
payment) as specified in the Electricity Supply Code notified by the
SERC at the intervals of at least once in every two months in
respect of consumers in town and cities and at least once in three
months in respect of all other consumers.
2. A duplicate copy of the bill may also be demanded in case of loss of
the original bill and to know the amount of the bill (including due
date for payment) on the spot from the office of the electricity
distribution company designated for the purpose. Consumers also
have the right to report non-receipt or loss of bill over telephone
and to request for the amount of the bill (including due date for
payment) after providing identity verification.
3. Demand from the electricity distribution company an explanation
of the basis of computation of the bill.
Forum of Regulators iv